Pa. attorney general objects to Allan Domb’s bid on a UArts building, saying it must be used for education purposes

The Pennsylvania attorney general has filed an objection to real estate mogul Allan Domb’s bid on a former University of the Arts’ building, citing a restrictive covenant that required it be used for education and exhibition purposes.

Domb last week bid $6.5 million for the Art Alliance building at 251 S. 18th St., which includes a theater and art gallery. His was the first bid to come in on nine UArts’ buildings up for sale through bankruptcy court. Domb said last week that he hadn’t decided what he planned to do with the building.

When the Philadelphia Art Alliance merged with University of the Arts in 2018, a “a restrictive deed covenant” was placed on the property, Attorney General Michelle Henry’s office said in a court filing Monday. The attorney general has oversight of charitable assets.

» READ MORE: Real estate mogul Allan Domb wants to buy UArts’ building for $6.5 million

“The covenant requires that the building be used ‘exclusively for purposes of education, exhibition, discourse and general public benefit consistent with [UArts’] mission ... or otherwise for recognized charitable purposes,’” the court filing said.

A neighboring educational non-profit, the Curtis Institute of Music, had considered bidding on the Art Alliance building, according to Patricia Johnson, a spokesperson for the school. But after Domb put in his bid, the Curtis board decided against it because they didn’t want to pay more than $6.5 million for the property, Johnson said.

Domb, a former Philadelphia City Council member and mayoral candidate who already is one of the biggest property owners in Center City, was not available for comment.

In awarding the bid, the UArts trustee “must not only weigh the financial aspects of the transaction but also look to the countervailing consideration of charitable interests,” the attorney general said.

The attorney general’s office noted that Temple University bid $6.2 million ― $300,000 less than Domb ― for the building and should get it, citing the university’s Philadelphia location, shared “educational principles and programs” with UArts, and admission of more than 350 former UArts students.

The attorney general also noted Temple’s financial stability and “immediate need for space in center city for its visual and performing arts programs.”

» READ MORE: Temple has made an $18 million bid on UArts’ largest building, one of nine for sale

“Their bid should have preference over others which lack these necessary criteria,” Henry wrote. “A more closely aligned use cannot likely be found.”

Temple also last week bid $18 million for UArts’ Terra Hall, the largest of the shuttered university’s buildings. Temple President John A. Fry said last week that the university wanted to move its Center City campus to Terra Hall. Temple currently rents space at 1515 Market St.

In a statement Monday, a university spokesperson said Temple would use the Art Alliance building “to present the talent and expertise of” its Tyler School of Art and Architecture and the Center for Performing Arts.

“The University’s goal would be to use this facility as an intellectual hub, showcasing research and educational achievements of Temple’s faculty and student body by bringing lectures, exhibitions, poetry readings, theater and music workshops and other cultural events to the City of Philadelphia,” the statement said.

» READ MORE: University of the Arts asks judge to distribute endowment with partner schools

Domb said last week that he had been interested in acquiring the 18th Street building for decades and expressed interest in purchasing it from the Art Alliance as far back as 2000. He said the building requires substantial renovations, although he did not inspect it before bidding.

“I just did a gut inspection of it,” Domb said. “I just love taking these old historical buildings and maintaining them and bringing them back to life.”

In November, Fry said Temple had carefully evaluated UArts’ buildings to determine the amount of deferred maintenance and investment needed.

That evaluation actually began when Temple was discussing a possible acquisition of UArts. But those talks fell apart after the Hamilton Family Charitable Trust, which says it has contributed about half of UArts’ $63 million endowment, said it did not favor having the endowment go to Temple as part of the deal.

UArts filed for bankruptcy in September, launching the process to sell its Center City buildings and use the proceeds to pay off bond debt of around $46 million and other liabilities. The school abruptly closed last June, leaving its students and staff scrambling.

Staff writers Jake Blumgart and Peter Dobrin contributed to this article.